5 CVPDC Housing Market Assessment
The following provides a regional-level analysis of major trends impacting housing within Central Virginia Planning District region. All data has been aggregated to the regional-level and includes:
- Amherst County
- Appomattox County
- Bedford County
- Campbell County
- City of Lynchburg
5.1 Takeaways
- Population growth as a result of domestic migration due to COVID-19 pandemic
- Growing renter population — particularly a growing higher income renter population
- More and more smaller households coming to the region
- Continuing income disparities — between white and Black households
- Loss of smaller sized housing
- Major home price increases and rental vacancy declines due to COVID-19
- Affordability challenges hitting people of color, renters, and those living alone the most
5.2 Population trends
From 2010 to 2020, the Lynchburg region only grew by six percent, an increase of just over 15,000 people. This slow but steady growth across the last decade was punctuated by a slight decrease in population between 2019 and 2020.
For much of the last decade, growth in the region has been a result of both domestic migration and international migration. But from 2020 to 2021, there were significant shifts in the causes of population change in the region. Deaths outpaced births during this time, leading to a loss of over 600 individuals. International migration decreased, while domestic migration overwhelmingly became the reason for growth in the region.
These changes within the region were no doubt a result of the COVID-19 pandemic’s impact. With the increase in work-from-home (WFH), households from outside the region saw an opportunity to benefit from the relative affordability of the region, while still earning high wages from elsewhere. And sadly, the pandemic’s impact also contributed to losses among the community.
Despite the slight population decline from from 2019 to 2020, the region is projected to near 300,000 people by 2050 — a 13 percent increase from the 2020 Census.
5.3 Household trends
From 2010 to 2021, there has been a continuous increase in the number of renter households in the region. Cumulatively, there has been an increase of 3,226 renters since 2010. Although, there has been a cumulative increase in the number of homeowner households since 2010 — that increase is only recent as of 2020 and 2021.
The growing number of homeowners in the region are overwhelmingly the result of seniors (65 years and over). Between 2010 and 2021, there was an increase of 5,796 senior homeowners. The growth in homeowners was offset by major decreases in homeowners aged between 25 and 64 years old — an overall decrease of 5,180. Renter households saw increases across all age groups, but the greatest increase was among 45 to 64 year olds (+1,323).
Among household types, householders not living alone grew by 1,430 from 2010 to 2021 — more than any other household type. This household type mostly represents households with unrelated household members (i.e. living with roommates). Household types like this are expected in regions with major universities, but they can also be an indicator of affordability challenges as individuals increasingly need additional household members to contribute to rent or mortgages.
Householders living alone follow at an increase of 1,133. Household formation continues to be delayed among many individuals — contributing to the growing number of one-person households. But in the Lynchburg region, married couple households follow closely behind with an increase of 1,059 since 2010.
The region saw its greatest gains among households — both homeowners and renters — with two people or less. Two-person renter households saw the most growth between 2010 and 2021, increasing by 2,409. Household with three or more people only grew slightly, but three-person homeowner households actually saw a decline (-1,642).
The senior population grew by 9,021 individuals from 2012 to 2021. Much of that growth occurred among seniors living with family — mainly as a householder (+3,233) or as the spouse in a family (+3,091). The third largest change in the senior population was among seniors living alone (+2,291). This senior living arrangement can be a concern for communities. With more and more seniors living alone, aging-in-place is made more difficult without support from others.
With housing affordability becoming more and more of a challenge for families, some families are forced to live with others. This creates subfamilies, which the Census Bureau defines as:
A married couple (with or without children) or an unmarried parent with one or more never-married children under the age of 18, residing with the householder, but not including the householder’s spouse.
When grown children move back to the parental home with their own children under 18 or a spouse, they are considered a subfamily.
Within the Lynchburg region subfamilies are more than likely to be single mothers. But in recent years, the number of single fathers and married couples (both with and without children) living with another family has been on the rise.
While more and more families are living with other families, the number of multigenerational households has also increased in recent years — especially within Lynchburg and Campbell County, where the percentage of the population living in multigenerational households increased 2.4 percentage points from 2016 (5.5 percent) to 2020 (7.9 percent).
While other parts of Virginia are seeing an increasing number of adult children returning home to live with parents, this is not so much the case in the Lynchburg region. Young adults (18 to 34 years old) are increasingly living with a partner in the region, a 38 percent increase between 2015 and 2021. Adults living with their parents only increased by 1.5 percent during this same timeframe.
5.4 Economic trends
In the region, the distribution of homeowner incomes have shifted upwards. A greater share of homeowners are now in the $100,000 and more income range than back in 2010. Renter incomes have also shifted upwards but not as dramatically towards the upper income bands. In 2021, there 5,060 more renter households making between $50,000 and $149,999, a 92 percent increase.
Regardless of these shifts, income distributions for renter households continue to skew towards the low end.
Between homeowner and renter households there is a $35,236 gap in median household income. Adjusting for inflation shows that median household income has been relatively flat for homeowners in the last decade (7 percent increase), while the typical income for renters saw modest gains (18 percent increase).
Gaps in income between different races and ethnicities in the region continue to further racial inequities — especially in the housing market. Black households in the region make a fraction of what their white counterparts make. For every dollar a typical white household makes, a Black household only makes 62 percent of that dollar.
Hispanic households in the region have made major gains in income. When comparing inflation-adjusted income, Hispanic households in the region saw a 17 percent increase in median household income, the largest gain among any other group.
5.5 Housing stock
The bulk of the region’s housing stock is composed of single-family housing (74 percent). Much of the single-family housing stock resides in homeownership, but in 2015 single-family housing decreased roughly two percentage points from homeownership towards rental. Manufactured homes, which is included in the Other category, has continued to make up the second largest portion of the region’s housing stock (10 percent overall).
Rental housing stock is diverse and has grown to include duplexes, tri-plexes, and quads, as well as larger multifamily properties. While these smaller multifamily properties like duplexes once made up nearly two percent of the homeownership market, they have reduced to a half of a percent of the region’s entire housing stock.
Options like these have been touted as Missing Middle Housing, which are able to offer affordable homeownership options.
Most of the region’s housing is surpassing 20 years in age. A construction boom in the late 20th century (from 1960 to 1999) contributed to much of the region’s homeownership and rental housing stock. With aging housing stock, housing quality becomes an ever-present issue.
The number of smaller bedroom homes has been declining since 2010, particularly within the existing homeowner housing stock. From 2010 to 2021, there was a loss of 2,435 two-bedroom homes in homeownership. Some of that loss could be accounted for in a transition to rental, but two-bedroom rentals only increased by 1,487. One-bedroom rentals, often in-demand by young professionals, as well as those most in need, also so a decline (-191), but two-bedroom rentals accounted for much of the growth in the rental market.
Larger homes with three or more bedrooms saw the greatest increase in the region. Although larger homes are meeting a demand, they often come at the expense of affordability.
Manufactured home communities are spread out across the region. These homes often serve as market-rate affordable housing, but they are face several challenges, including risk of redevelopment, poor housing quality, and aging infrastructure.
There are 99 manufactured home communities in the region. Three quarters of the communities in the region are small, consisting of less than 50 homes.
Note
TO ADD LATER: specific issues and context on MHCs
The region has still not recovered to its Great Recession building-levels, when residential building permits peaked at 1,840 in 2005. Since 2012, permits have only averaged at 768 per year, less than half of what it was in 2005.
In addition, the early 2000s saw a greater number of two to four bedroom homes. But by 2005, these diverse types of housing were nearly non-existent from the building pipeline in the region.
5.6 Homeownership market
The regional homeownership rate has been on a slow decline in the last decade, from 72 percent in 2010 to 70 percent in 2021.
As the homeownership rate has declined slightly, the regional median residential sales price has continued to climb in recent years. Although fluctuating between $180,000 and $225,000 between 2016 and 2019, the region saw a major bump in early 2020 as the pandemic impacts hit the region’s housing market that have kept home prices well-above $225,000 ever since.
The impact of the pandemic is most noticeable when looking at the number of closed home sales and average days on market. The region saw record high closed home sales during the summers of 2020 and 2021, when it hit 435 sales in June 2020 and then 448 in June 2021.
The demand in the region is further exemplified by the dramatic decline in average days on market. Already on the decline since 2017, the region hit record low average days on market in middle of 2021. Since then, homes have remained below an average of 40 days on the market.
With increasing mortgage interest rates in recent months, home sales, as well as prices, have seen declines. But prices will continue to rise, although not as rapidly as during the early aughts of the pandemic when record low interest rates opened up housing opportunity for many who could not have afforded a home otherwise.
5.7 Rental market
Average rent for the region has been relatively flat since 2016. The average market asking rent was $1,049 in the first quarter of 2016. By the fourth quarter of 2022, the typical rent in the region had only increased by $3 to $1,052.
In spite of the minute changes in average rent over the past few years, the rental vacancy rate took a major dip in the second half of 2020, reaching a low of 3 percent in Q3 2021. Rental vacancy has increased since the end of 2021, but has yet to reach pre-COVID-19 levels.
5.8 Affordability
Housing affordability is most often defined by housing where a homeowner or tenant is spending no more than 30 percent of their income on their housing costs. Those households that spend more than 30 percent are considered housing cost-burdened. This metric is a standard measurement for housing affordability, especially in terms of state and federal programs.
In the region, there was a total of 23,419 cost-burdened households in 2021, fifty-three percent of which were renters. This 2021 estimates is a 12 percent decrease from 2010 (-3,123), when the total cost-burdened households was 26,542. At that time, 59 percent of those cost-burdened households were homeowners, indicating a major shift in who is cost-burdened in the region.
The U.S. Department of Housing and Urban Development receives custom tabulations of American Community Survey data from the U.S. Census Bureau. This data is used to demonstrate the breadth of housing needs across the country. This data lags behind ACS data by about two years, but it provides a snapshot of the different impacts of cost burden by area median income, household type, and race and ethnicity.
From 2012 to 2019, Cost burden in the region has generally been declining for higher income households, particularly those making above 50 percent AMI. But for households making 30 percent AMI or less, cost burden has increased rapidly between 2017 and 2018, going from 67 percent to 79 percent. Although there was an overall decline in cost-burdened households making 30 percent AMI or less between these years, the share grew significantly.
Across all household types, cost burden has been declining from 2012 to 2019. However, nearly a third of elderly, non-family (31 percent) and non-elderly, non-family (37 percent) household types are cost-burdened. These households are typically individuals living alone or with other unrelated adults. Family households are less likely to be cost-burdened, but nearly one in five large and small family households were still cost-burdened in 2019.
There has been a decline in the share of cost-burdened white and Asian households in the region between 2012 and 2019, while there has been little to no change in cost burden for other racial and ethnic groups. Although Hispanics in the region saw an initial decline in cost burden from 2012 to 2013, that decline was negated by 2019, when the percent of cost-burdened Hispanic households reached 37 percent, a two percentage point increase from 2012.
Disparities exist and have persisted in regards to race and ethnicity and cost burden. White households are less likely to be cost-burdened than any other racial or ethnic group in the region. As of 2019, 20 percent of white households were cost-burdened. The closest group were Asian households and yet they were still eight percentage points above their white counterparts. Black, Hispanic, and other racial groups (including multiracial households) experienced cost burden at least 15 percentage points above white households.